Want to succeed in sustainability? Learn to manage risk

The opinions expressed here by Trellis expert contributors are their own, not those of Trellis or its editors. It’s no surprise that corporate sustainability today is increasingly viewed as a risk management exercise. Sustainability professionals are expected to wear multiple hats: “sustainability expert,” “compliance director” and “risk manager.” This intersection is being driven by tightening international reporting requirements, supply chain vulnerabilities and the need to strengthen the connection of sustainability to business outcomes.  In short, to succeed in today’s environment, sustainability managers must thoroughly integrate their job into the core functions of a company’s business model, including enterprise risk management, strategy and finance.  Why this dual role is an asset As ESG is increasingly seen through the lens of risks and opportunities, it’s becoming not only integral to business strategy, but also a competitive advantage for companies that take this holistic view. Many regulatory and voluntary reporting systems frame sustainability not only through the lens of risks and opportunities, but also specifically call out the actual or financial impacts that sustainability-related issues represent to a business.    For instance, supply chain vulnerabilities due to climate hazards, such as drought, extreme heat and storms, force businesses to assess these events through a risk management and resilience lens. The Corporate Sustainability Reporting Directive (CSRD) further cements this connection with double materiality assessments, enterprise risk management evaluations and value chain analysis. The Task Force on Climate Related Financial Disclosures (TCFD) and the related Task Force on Nature-Related Financial Disclosures (TNFD) are cases in point. These…

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